The Analytics of Uncertainty and Information

Sushil Bikhchandani is a Professor in the Anderson School of Management Economics at the University of California, Los Angeles. His teaching and research interests include auctions, market institutions, herd behavior and information economics. Professor Bikhchandani has published in numerous academic journals, including Theoretical Economics, Operations Research, the Journal of Economic Theory, and Econometrica. Jack Hirshleifer (1925–2005) was an American economist and long-time professor at the University of California, Los Angeles. He taught at the University of Chicago from 1955 to 1960, and thereafter at UCLA until 2001. Professor Hirshleifer was well known for his work on uncertainty and information in economics, the economic analysis of conflict, and bioeconomics. His undergraduate textbook, Price Theory and Applications, went into seven editions. A 1958 article by Hirshleifer began the triumphant comeback of Irving Fisher's theory of capital and interest, now deemed canonical. John G. Riley is the Distinguished Professor of Economics at the University of California, Los Angeles. A Fellow of the Econometric Society, his research has appeared in eminent journals such as the American Economic Review, Econometrica, the Journal of Political Economy, the Quarterly Journal of Economics, the Review of Economic Studies, the Journal of Economic Theory, and the RAND Journal of Economics. Professor Riley is the author of Essential Microeconomics (Cambridge University Press, 2012) and co-author, with the late Jack Hirshleifer, of the first edition of The Analytics of Uncertainty and Information (Cambridge University Press, 1992).

• Part I: 1. Elements of decision under uncertainty; 2. Risk-bearing: the optimum of the individual; 3. Comparative statics of the risk-bearing optimum; 4. Market equilibrium under uncertainty; Part II: 5. Information and informational decisions; 6. Information and markets; 7. Strategic uncertainty and equilibrium concepts; 8. Informational asymmetry and contract design; 9. Competition and hidden knowledge; 10. Market institutions; 11. Long-run relationships and the credibility of threats and promises; 12. Information aggregation, transmission, and acquisition.

'This is a beautifully clear book on the economics of uncertainty and information. The second edition contains a good deal of valuable new material, such as on the production, transmission, acquisition, and aggregation of information.' Eric Maskin, Harvard University, and Nobel Laureate in Economics